Britain's largest insurer Aviva reported an 8 per cent drop in interim operating profit today, as the cost of Britain's heavy flooding weighed on its business.
But it gave an upbeat view of its outlook and Aviva's new chief executive, former finance director Andrew Moss, sought to assuage concerns over acquisitions, saying his priority was to realise the potential of Aviva's existing businesses.
First-half operating profit, on a European embedded value (EEV) basis, fell to £1.54 billion, just short of an average forecast of £1.57 billion, but within the range of expectations, which ran from £1.42 billion to £1.64 billion.
Hit by £235 million of weather losses after June's floods and January's Kyrill windstorm, Aviva said that first-half operating profit from its general insurance business dropped 34 per cent to £560 million.
However, its closely watched combined operating ratio - costs and claims as a percentage of premiums - was 97 per cent, ahead of the company's "meet or beat" target of 98 per cent, helped by its European businesses. A figure below 100 indicates a profit.
Aviva's life operating profit rose 24 per cent to £1.25 billion, boosted by its US unit.
Group sales rose 25 per cent to £19.29 billion, helped by a 51 per cent jump in its US business, after it bought AmerUs last summer, and by a 14 per cent rise in sales in continental Europe, where it has signed a raft of distribution deals in the past few months.
New business contribution - net of required capital, tax and minorities - rose 25 per cent to £240 million.
Aviva raised its interim dividend 10 per cent, in line with expectations, to 11.9 pence.